AECOM Plans to Sell Construction Management Amid AI and Market Growth

The Facts -

AECOM's Ambitious Vision for Infrastructure Development

As AECOM unveils its fiscal fourth quarter earnings, the company anticipates a robust future driven by a surge in infrastructure projects, a trend fueled by ongoing legislative support. During a recent investor presentation, executives from the Dallas-based firm shared insights into their strategic outlook, foreseeing continued strength in their largest construction end markets.

The Infrastructure Investment and Jobs Act, alongside high state Department of Transportation budgets, plays a pivotal role in propelling project development, according to CEO Troy Rudd. This opens opportunities for extensive growth in transportation and water projects for years to come. Rudd emphasized the need for substantial investment in traditional infrastructure sectors, stating, “There is no question that over the next few decades, there needs to be a significant continued investment in traditional infrastructure, whether it’s water infrastructure or transportation infrastructure or social infrastructure.”

The CEO also highlighted prospects beyond transportation and water, with defense construction and energy projects poised for expansion. The growing demand for electricity, driven by the artificial intelligence boom, is anticipated to spur significant investments in energy and power sectors. Rudd noted, “There’s an insatiable need for energy, in particular electricity. An amazing investment is going to take place in AI and data centers, and all the power and the water you need to make that a reality.”

Key markets, including the United States, are experiencing shifts in permitting, creating opportunities to expedite major civil programs faster than previous cycles, as reported by AECOM leaders.

Strategic Shifts and AI Initiatives

AECOM is considering divesting its construction management business to concentrate on higher-margin design and engineering services, according to Rudd. The upcoming quarter will see the construction management unit classified as held for sale and moved to discontinued operations. This decision aligns with a trend of increasing M&A activity in the construction sector, as firms like Zachry Construction and Cumming Group expand through strategic acquisitions (source).

Rudd described the construction management team as a “fantastic business” and expressed confidence in finding a better fit for them. “We have reached that point in time where we think there’s a better place, a better home, eventually for our construction management team,” he stated.

AECOM is also making strides in artificial intelligence. Its internal AI program, built over 18 months, features generative design models to assist with infrastructure designs, potentially reducing costs and materials by 10% to 20%. “It gives us the ability to materially reduce cost,” said Rudd, highlighting the impact on design efficiency.

Q4 Financial Performance

In the fiscal fourth quarter, AECOM reported $120.4 million in profits, marking a 30.2% decrease from the previous year, while revenue increased by 2% to $4.18 billion. The company’s backlog reached a record $24.8 billion, reflecting a 4% increase year over year.

The financial results, presented during the analyst day, were well-received by industry experts. Andrew Wittmann, senior research analyst at Baird, commented, “AECOM’s fiscal fourth quarter 2025 report lands coincident with its analyst day and refreshed long-term outlook through 2028. Results slightly topped expectations across the board.”

For more details, the company's investor presentation can be accessed here, and further insights on the infrastructure investment landscape are available here.

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